PRC-1 · Chapter 6 · Question 90 of 100
Which accounting concept underpins the requirement that the cost of an asset should be matched against the revenue it generates over multiple periods?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Accruals (Matching) Concept
Explanation
The matching concept requires that expenses are recognized in the same period as the related revenues. Depreciation perfectly embodies this by spreading the capital cost over the periods benefiting from the asset.
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